SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16899 / February 14, 2001
SECURITIES AND EXCHANGE COMMISSION v. JOANNE M. MOORE, ANN W. McCAUSLAND AND MICHAEL J. McCAUSLAND, United States District Court for the District of Columbia, Civil Action No. 1:01CV00336 (D.D.C.) (filed February 14, 2001)
SEC BRINGS SETTLED INSIDER TRADING ACTION AGAINST THREE INDIVIDUALS FOR TRADING IN THE SECURITIES OF US AIRWAYS GROUP, INC.
On February 14, 2001, the Securities and Exchange Commission filed civil fraud charges in the United States District Court for the District of Columbia against Joanne M. Moore, Ann W. McCausland and Michael J. McCausland, alleging insider trading in the securities of US Airways Group, Inc. prior to the May 24, 2000 announcement that UAL Corporation had agreed to purchase US Airways.
The Commission's complaint alleges that on May 23, 2000, Joanne Moore, then a paralegal at the law firm of Swidler Berlin Shereff Friedman, LLP, learned about the upcoming merger in the course of her employment at the law firm. According to the complaint, Joanne Moore tipped her secretary, Ann McCausland, about the upcoming merger. The complaint further alleges that Ann McCausland then called her brother, Michael McCausland, and sent him e-mails from her office telling him about the upcoming merger and recommending that he purchase US Airways stock. According to the complaint, within minutes of being tipped by his sister, Michael McCausland purchased 1,500 shares of US Airways stock at $26 per share. When the merger was announced on May 24, 2000, the price of US Airways stock increased approximately 86%, from $26.31 to $49 per share. Michael McCausland sold his US Airways stock the day of the announcement, making a profit of $33,138.57.
The defendants consented, without admitting or denying the allegations in the complaint, to the entry of final judgments permanently enjoining them from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In addition, Michael McCausland has agreed to pay $33,138.57 in disgorgement, $1,512 in prejudgment interest, and a civil penalty of $33,138.57. Ann McCausland and Joanne Moore were not assessed civil penalties based on their financial condition.http://www.sec.gov/litigation/litreleases/lr16899.htm